Ever Wondered Why Prices of Steel Kept Increasing?

To those in the construction industry, they must have heard the story. On what was the reason behind the increase in steel such as angle bars, common wire nails, etc. for use in the construction industry.

Before it was China making most of the demands for these products. And now it is the middle east who are consuming most earning lots from exporting oils worldwide, now it is their turn to use those earnings to developed their country by constructing more buildings.

The construction boom in middle east thus created a gap between demand and production capacity thus finds a need to increase. Do not ever wonder if steel will keep increasing.

As quoted by the Jeddah Chamber of Commerce and Industry

It estimated that the Kingdom requires at least 1 million new homes in the next five years to address population growth needs. Similarly the Ministry of Education has outlined a $4 billion plan to build another 4,000 schools.

China, a Global Inflationary Influence?

According to Ben Simpfendorfer, China strategist for the Royal Bank of Scotland:

"Where China was a deflationary influence over the last 10 years, it will be an inflationary influence over the next 10 years."

In the next ten years economists studied that China will be a global influence in inflation. Where during a time when Chinese wages is just about 4% of that in the United States, it has started to increase dramatically. Noticeably, Chinese export prices continuously went up compared to that of other Asian countries such as Malaysia, Thailand and etc. While properties went up to as high as 10%.

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